Malaysia oil and gas The Malaysian government has also chalked out ambitious plans to develop Malaysia as the regional oilfield services hub. This is expected to increase domestic and foreign investment into this sector with many private sector participants having shown interest in this sector. Currently, the Malaysian oilfield services and equipment market is estimated to be around RM2 billion annually. Razeen adds, “Malaysia’s offshore producing fields are more mature than those of its Southeast Asian neighbors such as Brunei, Indonesia, Thailand and Vietnam. This translates to more opportunities for Joint Development Agreements or Production Sharing Agreements (PSA) in Exploration and Developments, Asset Commissioning and Asset Management for various Offshore Support Services, all of which will continue to drive growth of this sector and make Malaysia stand out as the Regional Oilfield Services Hub. The recent PSA between Petronas and Brunei National Petroleum Company is a good start to the year.” Brownfield services and Marine support services will also continue to be high growth subsectors with an estimated RM2 billion worth of contracts in offshore maintenance and marine provisions up for grabs. Another subsector attracting a lot of interest is decommissioning services. “Of the 900 odd offshore structures in the Asia Pacific region, around 600 of these are over 20 years old. Decommissioning is new to the region and many countries, including Malaysia are developing their own regulation for decommissioning. The opportunities for service providers are enormous going by the costs involved for decommissioning. While the average cost to plug and abandon a well is estimated to be USD750,000, the average cost to decommission a platform is USD2.5 million,” Razeen says. 2011 will also see emphasis on Enhanced Oil Recovery (EOR) activities. Currently, Malaysia’s average recovery ratio of approximately 23% is far from the industry leaders’ 42-45% range. A recovery ratio of 23% means that for every 100 barrels of oil
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in the ground, only 23 barrels are brought to the ground while the remaining 77 barrels remain yet to be recovered. A big push in reservoir management initiatives is certainly underway. “While the typical primary and secondary recovery methods such as facility upgrades, de-bottlenecking, pipeline optimization works, well production enhancements, acid stimulations, side-track drilling and more prudent reservoir management still go on, EOR activities in the form of concerted efforts in gas, water, microbial, and chemical injection methods, together with thermal recovery solutions will increase the recovery ratio, that is, the total extraction from the reservoir of the producing fields,” says Razeen. He continues, “Exxonmobil Exploration and Production Inc. (EMEPMI) leads these effort via its estimated RM6.5 Billion Tapis Rejuvenation project on 7 of its shallow water, brownfield developments with an estimated 20 Million barrels of oil equivalent reserves to be added. EOR projects of a massive scale similar to this have never been done in Malaysia, so this is an encouraging start.” Another area that is likely to see a spate of
investments is the development of marginal fields. Under the economic transformation program, the Malaysian government has indicated that developing marginal fields will be a priority. A significant portion of Malaysian hydrocarbon reserves are locked in small fields with less than 30 million barrels of recoverable hydrocarbons. With increasing oil prices and innovative solutions, these fields can be exploited economically. Development of marginal fields will continue to gather momentum during 2011. MediA ConTACT: Donna Jeremiah Corporate Communications – Asia Pacific P: +603 6204 5832 F: +603 6201 7402 E: djeremiah@frost.com Carrie Low Corporate Communications – Asia Pacific P: +603 6204 5910 E: carrie.low@frost.com